If you make a donation of clothes , books , or household items to Goodwill or similar do you “low ball” your donation for your tax return? We give quite a bit -but for some reason I am reluctant to put it all down. I feel like it will send up some kind of red flag.
For a donation of over $250, you need to get a receipt from the charity. Supposedly.
I admit, I lowball it. Especially since the receipt is just a piece of paper that I filled out, it isn’t notarized or anything.
But I don’t know if a lot of tangible donations would be enough to raise a red flag.
We are (ok - just me, but I’m hoping H will get motivated too) downsizing, and donating clothing, furniture, bikes, books- all kinds of stuff. I didn’t want to have to deal with listing it all on Amazon or eBay, or having even a yard sale.
http://www.irs.gov/uac/Newsroom/Tips-from-IRS-for-Year-End-Gifts-to-Charity
I take pictures, make a list of items, and claim low amounts for them. I donate to Goodwill and often browse in the store - where you can get an idea of a fair market value for items in your area. I think you need to file a separate form if you donate more than $500 in clothing, books, etc.
Thanks. That is helpful.
I use whatever “It’s Deductible” (free online) says the stuff is worth, and use the “lower quality” choice unless it’s something that is literally unused with the tags on (which happens sometimes)
We use Turbo Tax, which has a estimated value of good, poor etc. quality. It is pretty accurate.We donate quite a bit to our local, very large Goodwill and we do need the special form.It’s always been accepted. Goodwill here hands out a blank form that we can fill out, but I write down the date of donation and explicit descriptions of what we give away on a pad that I keep until tax time.
Thanks!
I should remember to take photos. That is a good idea.
I just realized I did take a bunch of photos last time I donated a lot at one time, but later deleted them to save space on my phone, not remembering what all the photos were for!
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The thrifty shop I donate to send me a letter indicating the value of my donation.
I think I will start taking pictures too.
I do lowball my Goodwill donations to keep it under $250.
I need to read the appropriate publications for next year though because I started driving for Meals on Wheels this year and it will add up to a substantial amount.
I have never had an issue using ItsDeductible (just Google that) values with a scattering of high and medium value depending on what the condition was. I will go over $250 and have a general receipt. Accountant only wants more info if any one item was over $500.
Thanks
You need a receipt for ALL non-cash donations. The generic form you get from Goodwill is fine, but your best bet is to attach an inventory of items. If total non-cash donations are more than $500 you need to complete form 8283 as well as schedule A. For “cash” donations you also need a paper trail - a cancelled check, a receipt, or credit card statement listing to donation. For mileage you need a log. You don’t have to show the specific records to your tax preparer, but have them available in case of an audit - the IRS will require them, or will deny your deductions.
^I never claim more than $500 for non-cash donations because of this.^ I guess I am too lazy to do the extra paperwork.
I donated a dining room set and some extra furniture to habitat for humanity this year and used its deductible. I have a list of what I donated but didn’t think to take pictures. I donated bags and bags of clothing and household items but way under reported them.
The only time that a charitable deduction was complicated was when I donated a car. They wanted the paperwork for that.
I don’t know about other charitable organizations, but Goodwill has a spreadsheet on its website listing suggested values for commonly donated goods. I use the mid-range value from that spreadsheet for clothing and household items I donate.
I like to err on the side of caution, so when I donate household items, I make a spreadsheet listing the items, their condition and their fair market value (based on Goodwill’s suggested values). I also take pictures. I print my spreadsheet and pictures out and make sure the person from the charity initials them (and not just the blank receipt) when I’m dropping off the donation. It’s a little extra work, but it gives me peace of mind.
Here is Goodwill’s set of $ values for donated items. There is a range for everything.
http://www.goodwill.org/wp-content/uploads/2010/12/Donation_Valuation_Guide.pdf
We always give a lot and have never gotten into trouble with our taxes even with non-cash donations over $500. If it’s a specific item that could fetch a lot of money, I will go to ebay or some other site and print out something that says what it sold for (not just what they were asking for it). I tend to lowball the $ amount because it just seems safer.
For regular donations, I haven’t taken photos but just made a list and stapled the receipt to it.
Yes, if it’s an item that is $50 or higher, I do take a photo of it or comparable item and get a current Craigslist or eBay “buy it now” price and print it & put it in my tax receipts file for the CPA.
My $.02 (as a real live tax guy). $500 of non-cash donations = ~ $200 of tax for a top bracket taxpayer. An average taxpayer might save ~ $150 of tax. Bottom line, the $500 of non–cash isn’t really worth them chasing. Too much effort with very limited economic upside for the IRS.
Now if you’re using Form 8283 for non-cash between $500 - $5,000 you should be a little more careful. I’m still not convinced pictures are that valuable, as I can take pictures of anything whether I owned it or not.